An internal investigation released on Tuesday shows that
Deputy Interior Secretary J. Steven Griles met at least a dozen
times with representatives of Peabody Coal, the company at the
center of the Navajo Nation's billion-dollar breach of trust and
racketeering lawsuits.

The high-profile cases accuse the world's largest coal company of
conspiring with top Interior officials to deny the tribe
a high royalty rate on its coal assets. The lawsuits are pending
in the federal courts and carry a price tag of at least
$1.2 billion.

Federal approval of Peabody's mining agreement
came during the Reagan administration, when Griles oversaw
the office that recommended the tribe receive a 20 percent royalty
rate for what has been called one of the most valuable coal deposits
in the world. But after a Peabody lobbyist met with then-Interior
secretary Don Hodel to protest, a decision in favor of the high
rate was suppressed. The tribe, under intense economic pressure,
ended up settling for 12 percent.

Nearly two decades after the debacle, Peabody continued to enjoy
top-level access to department officials, the report shows.
On at least 11 occasions, Griles met with Peabody to discuss
the company's coal mines on the Navajo and Hopi reservations,
and on at least two occasions, he discussed the company's
proposal to build a power plant near a national park.

Griles was never a lobbyist for Peabody, the world's largest
coal company. But he did represent the National Mining Association,
an industry organization that paid Griles and
business partner more than $140,000 in lobbying fees from
1997 to 2000. Peabody belongs to the organization.

The close ties and the media attention they received
were enough for Inspector
General Earl E. Devaney to review Griles'
dealings with Peabody. But since the company was not
a client, the report did not draw a conclusion on whether
the contacts were appropriate.

For some Navajo leaders, however, Griles' return to the halls he
once occupied in the 1980s has been enough to warrant alarm.
Tribal leaders were incensed when Griles and Ross Swimmer,
who approved the lower-paying Peabody lease as head of the BIA,
were appointed by the Bush administration to top positions.

According to the report, Griles defended his meetings with Peabody
as a necessary part of the job. The Navajo
Nation, the Hopi Tribe, the company and other parties
have been meeting to determine the future of the Black Mesa
mines. Griles has been "coordinating efforts" between
the Office of Surface Mining and the BIA, the report stated.

At one point, Griles was deposed by the Navajo Nation as part of its
legal actions. Swimmer also testified under oath but failed
to recall doing so when asked on a number of occasions.

In a highly-anticipated March 2003 decision,
the U.S. Supreme Court rejected the tribe's breach of trust
claim against the federal government. In a 5-4 decision,
the justices said the law the tribe cited did not give
rise to money damages. The majority found no problem
with Peabody's close contacts with top Interior officials.

But last October, the Federal Circuit Court of Appeals left
an opening for the tribe to pursue the $600 million
claim based on other laws. The decision was unanimous.

Separately, the D.C. Circuit Court of Appeals has kept the
tribe's lawsuit against Peabody alive despite
the company's heated efforts to have it dismissed, or alternatively,
delayed. Under federal racketeering laws, the tribe could
collect up to three times the damage allegedly suffered.

Peabody denies any wrongdoing in the matter. Company representatives point out
that the mines have created hundreds of jobs for Navajo
and Hopi tribal members and contribute a significant amount of
revenue to each tribal government.